Baroness Park of Monmouth: My Lords, can my noble friend the Minister say to what degree there is

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consultation between the Department of Health and the department which is dealing with the Bill? It seems to me that the major point made by my noble friend Lord Swinfen turns to some extent on what is perhaps a lack of consultation and, indeed, a lack of awareness of the repercussions of the actions of one department on another.

Lord Monkswell: My Lords, I support the noble Lord's amendment. I should like to compliment him on the very admirable and powerful way that he moved it. Indeed, the arguments put forward by the noble Lord are virtually irrefutable. However, I wonder whether the Minister could take on board another aspect which was not stressed by the noble Lord; namely, the impact that the provision in the Bill is likely to have on small businesses.

We can perhaps imagine the situation as regards the disabled person, the small businessman who is likely to be making the adaptation, providing the facilities, and so on, and the local authority; in other words, there are three parties involved. It seems to me that one of the results of the Bill as it stands is that, yes, the cashflow arrangements for a local authority may be very nicely streamlined and very efficient on paper, but the likely result in terms of the individuals that it affects--in particular, the disabled person and the small businessman--is that they will have to try to fit in with the local authority's timetable.

We should think for a moment about the small businessman. The chances are that he is not only undertaking such work for the disabled client; indeed, he is no doubt also undertaking other work. Therefore, it will make sense for him to have the flexibility to negotiate with the disabled person as regards the most convenient time to complete the work and also to take on board his own work schedules as regards the other work that he may be doing. In other words, he will try to undertake the work at a time that is most convenient both to the client and to himself. I am sure that the Government will recognise that that would be a very sensible way of organising the work.

However, because of the way the Bill is written at present such a situation will be turned around. Indeed, both the disable person and the small businessman carrying out the work will be dictated to in terms of when they receive payment from the local authority. It is worth remembering that most local authorities are multi-million pound operations. Even if one takes the housing sector within a local authority, that still constitutes a fairly big business concern, if I may put it that way. Therefore, its ability to accommodate minor changes in its cashflow is surely much better than the ability of a small businessman or, indeed, that of the disabled client in determining their affairs. I hope that the Government will, dare I say it, go along with their own philosophy in terms of providing sensible support and recognising the problems that small businessmen have to face. I also hope that they will look again at matter and perhaps agree to accept the noble Lord's amendment.

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Baroness Hamwee: My Lords, I, too, should like to support the noble Lord, Lord Swinfen. Local authorities have problems with regard to a large range of demand-led services. Inevitably there are problems as unforeseen demands have to be met as the financial year progresses and budgets are not available. It seems to me that this is the last group of people in respect of whom one should try to alter the balance of those arrangements. If I may say so, this measure is morally misconceived.

I am also puzzled that the Government feel it necessary--if they have to have this clause--to give themselves the opportunity to alter the period of 12 months. I can see the logic of a 12 month period in that it takes one to the same point in the next financial year, but why should the Secretary of State have the possibility of varying that period on a basis which we cannot at this point know, and indeed may never have the opportunity properly to scrutinise? I find that puzzling, but I do not particularly wish to pursue the puzzle because I should like to get rid of the clause altogether.

Lord Williams of Elvel: My Lords, I very much agree with what the noble Lord, Lord Swinfen, said, and indeed with the point that the noble Baroness, Lady Hamwee, has made. It is an odd subsection in a clause of a Bill which specifies,

"That date shall not be more than twelve months, or such other period as may be specified by order of the Secretary of State".

Why have that provision in the clause at all? We have no ability to scrutinise the Secretary of State's decision, as the noble Baroness pointed out. I was intrigued by the point raised by the noble Baroness, Lady Park of Monmouth, as to whether there had been any discussion between the Department of the Environment and the Department of Health on this matter. At a later stage in the Bill we shall reach a point when I shall ask whether there has been any discussion between the Department of the Environment and the Department of Trade and Industry on the Bill. I wonder whether the Government are speaking with one voice on this matter. I rather doubt it. I should be interested to hear what the noble Lord has to say in reply to the amendment of the noble Lord, Lord Swinfen, which basically we support.

Lord Lucas: My Lords, my noble friend made clear in Committee that he shared the concerns of other noble Lords about Clause 39. I explained that mandatory grants restrict local authorities' ability to maintain control over their resources, and that our purpose in bringing forward Clause 39 was to help local authorities in their financial management. I said that we envisaged the provision would only be used in exceptional circumstances. My noble friend suggested that we give thought to making clearer that the provision should only be used in exceptional circumstances, perhaps by rewording the clause. I share his views on the importance of bringing this message out, but it is simply not an appropriate matter to be placed on the face of the Bill. Rather it is up to us to make it clear in the guidance we shall issue to local authorities explaining the new provisions. This we shall do.

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This is a clause which is for the benefit of local authorities to enable them to manage their cash flows. If local authorities do not wish to make use of it, they will not do so. They will not need to make use of it, and they will not. If they need to make use of it, we think it is right that this provision should be there so that they can--within a certain limited extent--manage their cash flows. As I said in Committee, this will result in occasional inconvenience for some disabled people. That is a balance which we feel should be struck. However, it will not result in great inconvenience for contractors. They will know--and the disabled person will know--when the money is to be paid. The local authority has to say when the money is to be paid so they will know when the money is going to be there. It will be up to the contractor to decide whether he does the work early and waits for payment, or whether he waits until the money is there before doing the work. There will be no uncertainty.

Lord Monkswell: My Lords, I thank the Minister for giving way, but I wonder whether he appreciates the situation. It may be that there is some certainty as to when the money will be paid, but the Minister needs to recognise that there are other criteria to be taken into account. A small businessman may decide that the work will take two weeks to complete, and therefore he will start the work two weeks before the date on which payment can be made. But what happens if the work takes either a shorter or longer time, and that confuses the date of payment? The whole matter is a case of effectively dictating to the small businessman and the disabled person rather than allowing them the flexibility to adjust the time in which the work is done to the best convenience of both parties involved.

Lord Lucas: My Lords, to a certain extent the noble Lord, Lord Monkswell, is right. Of course this is not perfect in terms of the convenience of the disabled person or the contractor. But, as I said, we feel that is a balance which should be struck. As regards the power to vary the 12 month period, this would be done by negative resolution. It is felt wise to have this power to allow for unknown possibilities that may lie ahead. In case this proves to be the wrong time limit in practice, we felt that we should have in place in the legislation the power to vary it. However, we have no current intention to vary it.

As regards relations with the Department of Health, I can assure noble Lords that they are excellent. We have to work closely with the Department of Health on these matters. This is very much an inter-departmental area and we feel that we work extremely well and closely with the department. I am afraid that I agreed with my noble friend Lord Balfour that it is just a fact of life that money may be short one year and one has to postpone some expenditure into the next year. Local authorities face that sort of difficulty with their budgets, as the noble Baroness, Lady Hamwee, has said. In imposing a mandatory grant upon them, we feel that we should allow them the flexibility they will need to escape from a financial bind in exceptional circumstances.

Lord Williams of Elvel: My Lords, before the noble Lord sits down, will he respond to the point that the 12 month norm which is in the Bill at the moment is

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really not required by local authorities? I am advised by local authority associations that this is not needed. If it is in the Bill, it is wrongly looked on as a norm. Perhaps the Government would reconsider--given the problems raised by my noble friend Lord Monkswell, and indeed others--the cash flow problems, because I am advised (as I say, deliberately) that local authorities and, recently, local authority associations do not consider the 12 month limit in the Bill to be appropriate.